The 2010 Detroit Auto Show rolls on

Without a doubt, last year’s Detroit Auto Show was gripped with uncertainty as the financial crisis brought question on the future of Detroit’s so-called “Big 3″ — General Motors, Ford, and Chrysler — as to whether they can survive an avalanche of threats to their existence such as bankruptcy, energy efficiency, Asian competition, just to name a few.

What a difference a year could make and much of those fears were allayed but not without setbacks to the American auto industry. This year’s Detroit Auto Show is definitely more vibrant according to most experts who were interviewed by CNBC’s Phil LeBeau last night. Ford seems to be the standout brand in the event claiming both the best sedan and SUV awards.  The rebound in the U.S. economy and the stabilizing of pump prices has brought back American car buyers to large-size fossil-fuel run cars. Good management and broad range of products has afforded Ford to stay in the blue and has so far avoided Chapter 11 unlike GM and Chrysler.

Energy efficient cars such as hybrid and electric are yet to gain a significant market share in North America which has led many industry analysts  to think that petrol-run cars are here to stay for the time being despite President Barack Obama’s efforts to infuse public funding in the development of environmentally friendly vehicles.

This however has not stopped the upward surge in sales of fuel-efficient compact sedans especially in the United States. Korean car maker Kia has already put up their first North American plant and the brand is poised to join its Asian counterparts Toyota and Nissan in the growing U.S. light vehicle marketplace. This comes as the United States has ceded to China the title of being the world’s top car manufacturer in 2009.

Bountiful 2009 for Fannie Mae, Freddie Mac execs

I read an article posted on the CNN Money website written a couple of  days ago about the compensation package received this year by top administrators of mortgage giants Fannie Mae and Freddie Mac. It is amazing that despite virtually living under government lifeline, the CEO of both firms still enjoyed millions of dollars of salary and perks.

According to the report, Fannie  Mae CEO Michael Williams received $4.2 million in basic salary, meanwhile his Freddie Mac counterpart Charles Haldeman got $6 million. The Federal Housing Finance Agency, which oversees the operations of the two ailing companies, defended the million-dollar compensation package saying this attracts good talent.  The Treasury Department, which bailed out both companies by using billions of dollars of taxpayer’s money during the height of the financial crisis, also agress with the housing regulator.

It is odd that the compensation report was just released right after Congress adjourned for the holiday break, probably a move to averse strong criticism from politicians in Washington.

Main Street still losing the fight versus Wall Street

A year after the global financial meltdown began in Wall street, the tide has yet to turn in favor of the American public who suffered mostly because of the excesses of the behemoth banks. As shown on Al Jazeera’s documentary program “People and Power,” America’s Main Street still has a huge hurdle confronting them before a just and lasting solution toward recovery is realized.

When President Barack Obama was elected to office last year and promised change to be implemented in the financial system which would be pro-consumer, many thought the “evils” of Wall Street will finally be subdued. Unfortunately, for many Americans who has already lost their homes due to foreclosures, this effort by the current administration has hit a snag.

Financial institutions practically begged Congress last year to bail them out from their troubles which they themselves induced. Washington obliged through the TARP program thinking the move would allow banks to modify mortgages of their consumers, mortgages that forced out many ordinary American families out of their homes.

Wall Street, however, did not do their part of the bargain but instead is steadfastly lobbying in Congress to firewall any attempts of American consumers to protect themselves from similar scenarios. Others believe so powerful they are that they managed to convince U.S. senators to confirm Federal Reserve chairman Ben Bernanke for a second term in office. Vermont independent senator Bernie Sanders, who vehemently opposed Chairman Bernanke’s nomination, was even quoted in the press saying Bernanke was Wall’s Street’s guy.

Asset bubbles: Easy to predict, hard to prevent

I watched a CNBC special documentary yesterday and it was about asset bubbles. It talked about how it rampaged the Japanese economy in the 1980s, which has yet to recover, and the U.S. housing collapse which culminated to the Lehman fall of late 2008 that sparked the worst financial turmoil in U.S. history in decades.

Asset bubbles usually have the same face: inflated property prices, low inflation, and rock-bottom interest rates. Throughout man’s history since the modern financial markets were established, he has been faced with the same circumstances but almost each time still fall prey to greed and the hollow belief that all good things never last. Government, particularly the central banks, knew of the historical trends but seemingly has the tendency to get caught up with the bullish frenzy and forget their duty to protect the interest of the financial system until the bubble just simply burst in front of them.